Note: This is the 4rd installment of excerpts from my book manuscript of “More Human: A Journey To The Heart Of Great Leadership”.
Today’s story is about how I found my leadership secret weapon – an operational metric that could play a key role in our march to greatness, and provide a critical link between great customer service and profit. It was a marker I could meaningfully connect to a higher purpose of employee happiness -one of the key principles of More Human Leadership.
Failing the Supermarket Test
“Greatness is achieved when customers say we are great” – Lanham Napier, Rackspace CEO
As another calendar year drew to a close, while our cable TV company was buoyed by better sales numbers as a result of new service activations and stepped up marketing, we were still struggling to reverse a downward overall trend.
The past declines in video customers were indicative of an industry that encountered two formidable satellite TV competitors, and as a result lost massive chunks of market share. Our competitors offered more channels at a very competitive price, and were able to mass market. The cable industry, on the other hand, had not kept pace in the quantity of their offerings, and paid the price.
The cable industry also suffered from a horrible customer service reputation, and it unfortunately was well earned. It seemed at times that we couldn’t get out of our own way, with horror stories and cringe-worthy videos swirling around both online and off, feeding the beast.
We saw it in our first attempts to survey our customers when we acquired these properties. Sure, people left us on the one hand because someone was offering more at a competitive price. But on the other hand, there was a deeper issue – the cable operator just wasn’t liked.
This was vividly illustrated to me on one of my many road trips, when I had a conversation with a technician in Durango Colorado.
He said that under the previous owner, he was “ashamed to enter a food store in my uniform”, for fear he’d get stampeded with angry customers ready to lambast him for the cable company’s bad service.
That image really hit me hard. I thought to myself, “Ashamed. Wow.”
I responded “Tell you what, when we’ve completed our transformation, and we start providing world-class customer service, I promise you, you’ll not only be unashamed to walk in to a supermarket, you’ll be the toast of the store.”
A little stronger than I wanted to put out there, but it was now out there all the same. It was on the record.
I knew that for us to gain back market share, and to grow and prosper as a company, we HAD to build a world-class customer care and service operation. And more than anything else, pass the “supermarket test” so our employees could be proud of working for this company.
Making the Connection
Thankfully, I had a secret weapon that I had been working on that was about to get even more potent – a metric innovation that would become a proxy for profit.
In the fall of the previous year I had one of my managers, Bob, ask me if he could experiment with a “customer retention service” up in Helena, Montana.
He had used it when he was in the newspaper business, and he claimed that it was one “heckuva” retention tool.
It was a phone call made by a group of outbound callers in Ft. Worth, Texas, led by an intense, no-nonsense, straight-shootin’ Texan named John.
This group, called Connection Enterprises, would call all new subscribers after they had the service for a week or two, and have a conversation with them, thanking them for their business, and asking a couple of questions about the quality of their service.
My first reaction was – it sounded expensive, since they tried to call EVERY new customer. These were live calls, and since we were in the midst of building a new call center, we had done a lot of research and knew how much a phone call cost.
Bob was insistent. “We will save customers. I guarantee the ones that we call with this service will be more likely to stay with us than the ones who are not”.
He also knew something that I hadn’t yet (but would soon) learn – John W was another member of the “customer service as a passion” club.
The agents were well trained, supervised, and coached. They knew what to say, and how to say it. They also knew when to call; their “contact rate” (the number of people actually contacted against all attempts) was well over 50% – an impressive figure.
I eventually gave in and allowed Bob to do a test of the service in Helena, and went back about my other business.
Several months later, I got a spreadsheet in my inbox from Bob. There it was.
The customers that had been contacted had a “churn rate” (cable speak for disconnections) that was 30% less than the customers who had not been contacted.
I sat back in my chair. “Mmmmm……..”
I started to do the math in my head. “If we extrapolated this figure company-wide, that means we would save…..”
Bingo. Before I could finish that thought I had dialed Bob’s number.
“Hey Bob, how fast could John W roll this out to the whole company?”
My secret weapon was about to be unleashed.
Asking The Ultimate Question
Sure enough, after nearly a year of phone calls, that 30% figure held up, more than paying for the service. Plus, the additional service quality questions that John’s group were asking gave us solid insights that were allowing us to refine many of our processes and save unnecessary “truck rolls” (the trip to the customer’s house to fix something).
As the calls went on, I felt that there was even more we could do with them. Something that could really tie into the human connections of employee to customer – something I could use to illustrate the power of metrics to communicate my More Human business philosophy. I couldn’t quite put my finger on it, until I went to an industry-sponsored customer service conference and discovered the answer.
It was called the “Net Promoter Score”, or NPS for short. One of the presenters at the conference, a man from a cable company based in Europe, showed a bunch of slides that tracked this score over a certain time. They had decided to focus their customer service efforts in raising this score, and it certainly looked like they did.
Then, he showed a slide that tracked the score against the net profit. There was a very close correlation. I was VERY intrigued.
So intrigued that I ran to a bookstore near the airport and bought the book on which the score was based. It was called “The Ultimate Question”, written by Fred Reichheld.
What was the Ultimate Question? It was pretty simple: “Would you recommend this business to a friend?”
Reichheld believed that this one question tells us more about a customer’s overall satisfaction than any other, and in the book he claims to have done an extensive amount of research to back it up.
(A quick tutorial on how the score is calculated: The customer is asked to put the answer to the question on a relative scale of 1 to 10, 10 being the highest level. Those who give scores of 9 or 10 are called “Promoters”, those at 7 or 8 are “Passives”, and those at 6 0r less are “Detractors”. The NPS is calculated by taking the percentage of Promoters and subtracting the percentage of Detractors.)
Then, before the plane touched down, it hit me.
I thought, almost out loud, “If this really IS the connection between service and profits, then I have a kind of ‘profit proxy’ that I can use with the employees in the field, who, in the end, don’t really much care about profit.”
It was clear to me that this kind of human metric would certainly be more relatable to our employees than profit. Human metrics connect directly to what these employees do everyday. If we could measure their work in customer satisfaction and retention through the Net Promoter Score, then they can see how their work has value.
I barely got off the plane and dialed my cell phone to John W.
“Hey John, I want to try something on the callbacks, it’s called the Net Promoter Score”
“Let me look into that Terry, I’ll buy the book and let you know what I think” (Leave it to John to want to read up on this first).
He bought the book that day, and also saw the potential of the NPS (perhaps even more enthusiastically than I did). By the next week, and we were asking our customers the Ultimate Question on the callbacks.
There was a risk in doing such a thing. I privately wondered, “What if the score was really bad?” After all, I had just created a way for my bosses to see exactly how well (or how badly) we were doing out there in the field.
I could just imagine the scene with my boss. “Minus 10????? What’s going on?”
It was a long few days while we awaited the first week’s NPS scores, and then, John send me the results.
“46% NPS”. OK, not yet into “good profit” territory, but at least I could trumpet some progress – it was a score already well ahead of most other cable, internet and telecom companies.
We kept asking the question for the next several months, and as it started to climb, so did our profits, just as Reichheld had predicted. And, we were passing a lot more supermarket tests, much to the joy of our employees.
I had my proof, and my employee/customer connection. I had my profit proxy. I had my more human metric. It was indeed my secret weapon, now fully realized. And you could be darn sure I was going to use it!
Epilogue: We eventually got our NPS north of 60%, which was at the top of our industry, before the company was sold in 2010. John W and Connection Enterprises still make customer calls in Ft. Worth for other clients, asking the Ultimate Question. And some Starbucker guy was able to move to Portland OR and keep writing about More Human Leadership. 🙂